Germany also hit by market volatility in bond sale
Germany failed to raise its intended amount in a bond auction Wednesday, showing that even the eurozone's strongest economy is not immune to the anxiety gripping the markets over European debt strains.
Germany initially planned to auction six billion euros of 10-year bonds, or Bunds, but only received offers of 5.67 billion, according to a statement released by the the central bank, the Bundesbank.
In the end 4.76 billion euros were sold at an average yield of 2.59 percent.
German Bunds were trading at 2.547 percent on Tuesday evening.
It is the fourth of 69 German debt auctions this year to have been hit by insufficient demand by investors, according to the German Finance Agency with manages Germany's debt.
"It is entirely due to the volatility on the market today," spokesman Joerg Mueller told AFP.
German bonds are the benchmark for other eurozone states and are usually sought after by investors seeking to lower risk.
"Today's auction results illustrate that even though the flight-to-safety appeal of German bonds is notable ... German auctions [also] suffer from the volatile market conditions," Jan von Gerich, senior analyst at Nordea in Helsinki, was quoted as saying by Dow Jones Newswires.
Markets have become increasingly anxious in the past weeks over debt strains faced by weaker eurozone economies. Ireland's decision to a bailout has only shifted concern to Portugal and Spain, with investors driving yields on their bonds ever higher.
© 2010 AFP